When you want to drive a vehicle on public roads, you legally have to obtain an insurance policy. While the process of getting an car insurance policy isn’t that complicated, not every driver qualifies for the same coverage. Some drivers fall into a category known as “high risk” , and it can complicate things. If you find yourself in this category of Insurance for high risk drivers, does it mean that you will have to pay an arm and a leg for coverage? Will it be anymore difficult for you to get policy?
Drivers who are considered by insurance companies to be high risk often have difficulty obtaining reasonable rates for auto insurance. Many of these drivers feel trapped by high premiums and feel that they are at the mercy of the insurance company with few options for reducing their rates. Fortunately, there are possibilities for reducing auto insurance for high risk driver premiums. The best way to find cheaper coverage is to shop around.
Comparison shopping can yield significant savings as well as coverage that is more tailored to an individual’s current situation. While a particular company may work well with established drivers who have flawless driving records, their coverage may not be satisfactory for a high risk driver. In this case, it would be better to choose another company who is more willing to work with special situations. With any company, it is important to look not only at the cost but also at the coverage and service offered. Rock bottom rates with poor service or inadequate coverage may not be worth the initial cost savings.
What is High Risk Insurance?
The term “high risk insurance” can mean different things to different insurance providers. Some auto insurance companies use this term to describe people who have to get SR-22 insurance coverage. This is a form of insurance that is required for people who have previously had their license revoked or suspended. The state in which you live requires the insurance company to file a document with them proving that you have a minimum amount of liability insurance.
Other insurance companies use this term to describe drivers who are over the age of 70 or under the age of 20. Some insurance companies categorize drivers who have had a number of auto accidents or driving infractions in the past as high risk drivers.
Some companies will even throw you into this category if you drive a fast sports car or one that is prone to be in a high number of wrecks. Every insurance company has its own definition for people who are considered to be “high risk.” If you fall into any of these categories, then you may have to end up buying this policy, depending on what company you work with.
Are You High Risk Driver?
There are many factors that an insurance company considers before making the initial assessment as to whether or not they believe you (and your vehicle) are a high or low risk.
We shall start by listing the most important factors that depict your premium:
- Age of policyholder
- Gender of policyholder
- Annual mileage of policyholder
- Does the policyholder use the vehicle for business use?
- Are you looking to insure a performance car?
- Have you modified your car in any way (performance, looks or both)?
- Is your car desirable to a thief?
- Has your car got security devices fitted?
- Is the policyholder the only named driver?
- Where is the car located (crime area)?
- Where is the car parked at night?
- Has the policyholder any No Claims Bonus
- Has the policyholder had any accidents or claims in the past three to five years?
- Has the policyholder had any motoring convictions?
- How much Excess have you selected?
A DUI (driving under the influence) charge can be costly. In addition to fines and court fees, there are other hidden expenses that result from a DUI conviction. One such consequence is an increase in your auto insurance rates.
Once your insurance company discovers that you have a DUI conviction on your record, one of two things will happen: your insurance rates will skyrocket, or your insurance company will cancel your coverage altogether. Even if your coverage does not get cancelled immediately, your insurance company may opt not to renew your coverage when it expires.
If you have been dropped by your insurance company, or never had insurance to begin with, you will need to seek out DUI auto insurance. These policies are created for people who have been convicted of a drinking and driving offense. While a DUI auto insurance policy allows you to obtain coverage, it can be prohibitively expensive. There are no laws regarding maximum insurance premiums for DUI offenders. It is a good idea to comparison shop for the best rate on DUI auto insurance.
After a DUI conviction, you will be required to submit proof of auto insurance to your states DMV (Department of Motor Vehicles) for three to five years to have your driver’s license suspension lifted. Your auto insurance company will file an SR-22 form with the DMV to prove that you are currently insured.
The time frame during which you are charged DUI auto insurance rates depends on the insurance provider’s policy as well as your state’s laws. Each state has rules regarding how long a DUI conviction remains on your record. Once the conviction is off your record, your insurance premiums will go back down.
Having a DUI conviction automatically places a driver in the “Insurance for High Risk Drivers” category. However, you can take steps to demonstrate your responsibility to the insurance company. As part of your punishment for driving under the influence, you may be required to go to DUI School. In addition to the classes that are required for your sentence, you can take extra courses to show the insurance company that you are committed to safe driving.
Age of the Policyholder
As already known, young drivers are more likely to get into accidents, hence the young driver insurance premiums are much higher. Especially people aged between 16 to 24, have the highest risk factor. People from 25 to 49 have a much lower risk factor, and people from 50 to 64 are declared to be the safest drivers. Then again, starting from 65, the risk factor starts to rise. 75-yera-olds have quite the same risk factor as teenagers!
Gender of the Policyholder
It is a known fact that female car insurance is cheaper than car insurance for males. This is because females drive more carefully and slower that males hence in an accident the damage is proved to be far less. There are specific car insurance companies just for females however it is wise to compare policies from various companies as they are not always the cheapest or the best. But gender is important only for people under 25, as young men have lots of more accidents than young women. Married men between 18 and 24 have also fewer accidents, hence they have a lower risk factor – they can get a much cheaper young drivers insurance.
Annual Mileage of the Policyholder
The average mileage of the USA policyholder is set around 10,000 to 16,000 miles. When a driver exceeds this they are becoming a greater risk to the insurance company by spending more time on the road. If you only drive 8,000 miles per year then it is well worth telling the insurance company this information to receive extra discount.
Does the policyholder use the vehicle for business use?
Should you use the vehicle for business use (apart from driving to and from a place of work) ;- this again increases your chances of having an accident and subsequently increases your premium.
Are you looking to insure a Performance car?
Performance Car Insurance can prove to be very expensive as the insurance companies will always consider fast cars to be a high risk for accidents and furthermore, theft. A performance car in conjunction with a young male policyholder or a policyholder with little driving experience or no claims bonus will present a very expensive yearly premium often unaffordable.
Have you modified your car?
Once you have modified your car, you must inform your insurance company as failure to do so will render your policy null and void. Should you increase your vehicles power the risks are that of a performance car (or even greater as the standard factory-built car is not designed for power modifications b the public). However when you change the appearance of your vehicle i.e. alloy wheels, trendy paintwork, bodykits and so on, the risk of vehicle theft becomes much greater and once more the premium is loaded.
Is your car desirable to a thief?
An insurance company considers a performance or modified car to be highly desirable to the likes of theft. They also have statistics available of thefts of certain types of vehicle so it is prudent to check with a broker which cars are less likely to cause claim.
Has your car got security devices fitted?
Most modern cars that are in the upper class of their range are usually fitted with alarms and immobilizer as standard. This helps to reduce premiums. However should you decide to have extra security fitted such as a tracker then this results in lower risks to the insurance company (hence a lower premium for you) and gives you peace of mind knowing that you will always know the whereabouts of your vehicle.
Is the policyholder the only named driver?
It is often the case that the policyholder would require an extra (or few) named drivers on their policy to be able to drive their car as well. This will almost always increase your premium especially if the named driver(s) has little experience, is young or has had past claims or convictions. It is wise not to have additional driver on your policy if you want to keep control of spiraling insurance premiums.
Where is the car located ?
Insurance companies have wealth of statistical information on all areas of the USA and their claim-rate i.e., whether or not an area has a high theft or vandalism rate - this is decided by the policyholders postcode. It always helps if you can keep your vehicle garaged overnight which will entitle you to further discount. Unfortunately there is nothing else you can do about this except move house to a low crime area or simply change your car for a model that is unlikely to be stolen.
Laws are regulated at the state level, so the state where you live is a important factor. For example Hawaii has liberal laws and many uninsured drivers. North Dakota but has conservative laws and not so many uninsured drivers, also fewer cars, so less chance of accidents. Taken this into account people from Hawaii pay around 3 times higher insurance premiums than the North Dakotans.
Where is the car parked at night?
As described above, your car is much safer kept in a garage overnight, and an insurance company will reward you for this. The next best option is a driveway then finally on the road (the premium getting more expensive respectively). Be aware to always tell the truth to the insurance company as if you have declared you keep your car garaged overnight and it was stolen from the road, you may not be covered for any compensation.
Has the policyholder any No Claims Bonus
If you have zero no claims bonus then your premium will be set at the highest rate. Shop around as sme companies will give you an introductory 10-15% bonus which really helps your premium diminish. Lastly, drive carefully for the policy duration to gain an extra bonus and discount for the following years term.
Has the policyholder had any accidents or claims in the past three to five years?
Any accidents or claims in the past 3-5 years will render you a greater risk to the insurance sometimes company even if the claims were not your fault! For minor accidents it is always worth considering not making a claim so as not to lose your no claims bonus or have to pay out your excess.
Has the policyholder had any motoring convictions?
Points on your license from speeding and dangerous driving convictions will all have a bearing on future premium prices so be very aware of how you drive today could affect your pocket in the future. With the increase of speed cameras on today's roads and the sheer amount of tickets issued to innocent people who are not driving dangerously (just one or two miles per hour above the set limits) some insurance companies are taking little notice of speeding ticket offenses.
How much Excess have you selected?
When you initially take out your policy with an insurance company, they will ask you what 'Excess' amount you require. Excess is the amount payable to the insurance company when a claim is being made and is usually deducted from your compensation payout. The more excess you select, the cheaper your premium but should you have a claim you will lose this excess amount from your final compensation.
How to Find the Best High Risk Car Insurance
At the initial stages, one has to take the insurance of his car that is meant for high risk drivers. This is because he is not applicable for the standard rates and his background is not so clear with the concerned insurance company. Some of the insurance companies can even reject to give car insurance for high risk drivers while some charge much extra for such insurance plans. So, one has to take extreme care while choosing the one for him to lose minimum. For this purpose, one has to search for such insurance at the best possible price. If everything is planned, this search can be no less than fun.
The key to obtaining adequate coverage at a reasonable cost is to compare rates across several companies. Rates are determined by numerous factors including company loss ratios and the current market. Also, different companies cater to the needs of various types of drivers. Some companies specialize in insuring people with flawed driving records and can provide cheaper coverage than a company who focuses on older and more experienced drivers.
Another way to obtain better insurance rates is to attend a defensive driving class. Various classes exist for different needs including DUI offenses, speeding violations, accident awareness and others. Many times attending a class of this kind can remove points from the driver’s license which will in turn allow for better insurance rates. Teenagers and college students can look into programs that reward academic performance with better insurance rates. Also, some companies are looking into GPS programs that allow monitoring of teen driving habits and reward good behavior with lowered insurance rates.
Finding auto insurance for high risk driver can seem like a daunting task. It doesn’t have to be that way, however. Comparing insurance rates is made easier by using a centralized website that can check quotes across companies for you. By entering your zip code at the top of this page, you can receive your free auto insurance quote today. Don’t spend another moment fretting about insurance rates; your search for the best coverage at the lowest cost can start today.